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New York judge halts $15/month broadband, handing victory to telecom industry

Just days before it would have gone into effect, a New York judge on Friday blocked legislation that would have required Internet service providers to offer a $15 per month tier of service to low-income residents of the state.

The ruling represents a win for the telecommunications industry, which had filed a lawsuit against the law in an effort to prevent lawmakers from setting service prices.

"The broadband industry is committed to working with state and federal policymakers on sustainable solutions that will serve the needs of all low-income Americans," wrote USTelecom, one of the telecom trade associations that filed the industry's lawsuit, in a statement. "While well-intended, the state’s law ignored the $50 monthly broadband discount Congress enacted, as well as the many commitments, programs and offerings that broadband providers have made for low-income consumers."

However, as Communications Daily pointed out, the ruling is a simple injunction designed to provide the judge with more time to consider the issues involved in the lawsuit. Meaning, the issue isn't simple, both sides have valid points, and the ultimate outcome is still unclear.

And, for the time being, low-income New Yorkers won't get access to government-mandated broadband prices. Axios reported that New York estimates that 7 million people across 2.7 million households would qualify for the discounted service. However, a number of Internet providers in the state already offer services at or near the $15 mark.

Nonetheless, some analysts believe the battle in New York could have wider implications.

"As the major carriers all already offer a service as good as or better than required, we did not think the law in and of itself was material to investors," wrote the financial analysts at New Street Research in a note to investors early this week. "But we believed the ISPs would sue as they do not want the precedent that any government jurisdiction can require specific offerings at specific price points or that state governments have the necessary authority to impose those kinds of rules over ISPs."

At the heart of the issue is whether the US government can control the prices that Ameicans pay for broadband. The answer to that question lies in the legal interpretations of obscure telecom legislation.

"The legal situation is likely to remain muddled for some time," the New Street analysts wrote.

More broadly though, the issue highlights the changing political viewpoints around broadband. Once viewed as a nice-to-have service, the COVID-19 pandemic helped push broadband into the need-to-have category as lockdowns forced working and schooling onto the Internet. Already, President Biden has signaled that he not only wants to fund broadband buildouts with billions of dollars but also may want to control how much operators charge for services: "The President is committed to working with Congress to find a solution to reduce Internet prices for all Americans," the White House wrote earlier this year.

Whether and how such federal rate regulation efforts will come to pass remains to be seen. In the meantime, state legislators around the country will undoubtedly be watching events unfold in New York as they consider similar legislation.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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